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AbbVie (ABBV) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

AbbVie (ABBV) closed the most recent trading day at $78.45, moving -0.42% from the previous trading session. This change lagged the S&P 500's 0.17% loss on the day. Meanwhile, the Dow gained 0.03%, and the Nasdaq, a tech-heavy index, lost 0.32%.

Prior to today's trading, shares of the drugmaker had lost 2.92% over the past month. This has lagged the Medical sector's gain of 4.86% and the S&P 500's gain of 3.07% in that time.

ABBV will be looking to display strength as it nears its next earnings release. In that report, analysts expect ABBV to post earnings of $2.21 per share. This would mark year-over-year growth of 10.5%. Meanwhile, our latest consensus estimate is calling for revenue of $8.08 billion, down 2.39% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.81 per share and revenue of $32.77 billion. These totals would mark changes of +11.38% and +0.04%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for ABBV. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ABBV is currently a Zacks Rank #2 (Buy).

Looking at its valuation, ABBV is holding a Forward P/E ratio of 8.94. For comparison, its industry has an average Forward P/E of 14.85, which means ABBV is trading at a discount to the group.

Investors should also note that ABBV has a PEG ratio of 1.61 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 2.16 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 43, which puts it in the top 17% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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